Reduce variable costs per unit

• why might reducing variable cost Per unit lead to profitability

  Increases the value added per uniti

  customers do not notice a change in price
• would reducing the variable cost per unit lead to profitability ?

  yes - if suppliers can be persuaded to offer better prices and if operations can be organised more efficiently
• Why might reducing variable costs per unit not work

  Customers may notice a decrease in product quality

  lower input costs might mean lower quality inputs - can lead to greater wastage